Tuesday, April 11, 2006

The Federal Government is considering a report on taxation which includes recommendations for cuts to company and personal tax. Many lobby groups have been arguing for significant tax reform rather than just cuts. Actually, even the Federal Opposition have been calling for tax reform.

The SMH have said that the report, which may not be released until after the budget in May, does not support the claim that reform is required nor does it apparently support the claim that Australia is a high-tax nation. Importantly for NZ, the report is likely to say that while Australia is higher taxing than the US and Japan, it is lower taxing NZ, Britain, and Canada.

What will be important to consider, when comparing NZ's tax system with Australia's, is how the report treats various levies and surcharges, State and Commonwealth - while not necessarily taxes, the still nevertheless impact on net income.